Thoughts on #1 (Bay's Hollow)(From the MD&A Nov 30, 2009)
The permit will be transferred to Engle Hollow Mining, LLC (“EHM”) which will mine the leases under contract for
a price of $40.00/net ton loaded into trucks to be transported to market. The Company will have sole and
exclusive rights to market the coal produced at the Bay’s Hollow Mine.
The “Bay’s Hollow” mining permit is for the extraction of coal, using auger/highwall mining methods, in the
Jellico coal seam which averages a thickness of 91cm. The permit is complete and ready for transfer
pending the immediate posting of a bond. Based on the thickness of the coal seam, auger mining can
produce 4,000-6,000 net tons per month with an increase to +20,000 net tons per month if highwall mining
techniques are commenced. Production from the Bay’s Hollow permit is expected to last 12-18 months.
Laboratory analysis of samples taken from the proposed mining area on August 26, 2009 and analyzed by
SGS North America, Inc. showed a range of 2.27-4.67% ash, 0.79-1.1% sulphur, and 13,656-13,996 btu.
Initial offers for the sale of the coal are for $58.00/net ton at <10% ash, <average 1% sulphur, and >12,500
btu for up to 30,000 net tons per month beginning immediately
Ok, so if I am reading that correctly, EHM (the sub-contractor) is getting $40/ton loaded, and NAG is scooping the leftover as profit...
of which they are currently looking at $18/ton...
And that is excluding all subsidiary costs... HMMMMMMMmmmmmm
If this stuff is Met-Coal, then why are they looking at getting so undercut for it ($58 vs $100+????)
Anyway, I'm now looking at #2 in the MD&A, so maybe I'll post a follow-up on any points of interest from that part...